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How the LGBTQ+ community fares in the workplace

Despite visible corporate support, today’s workplace is falling short of full inclusion. Here’s what companies need to know.

Corporate America has played an important role in the progress of LGBTQ+ rights over the past two decades, with many companies making public gestures of support. Hundreds of major consumer brands have become regular sponsors of annual Pride events. A record 206 major corporations signed an amicus brief in the spring advocating for the Supreme Court’s June 2020 decision protecting LGBTQ+ individuals from workplace discrimination. 1 Companies are also increasingly making business-critical decisions about recruitment practices, employee-resource groups, and marketing that embrace LGBTQ+ rights.

Despite these outwardly visible signs of progress, many challenges persist. Likewise, a growing business case for inclusion has not translated into solid gains for the LGBTQ+ community within the workplace itself. According to our ongoing Women in the Workplace research, LGBTQ+ women, for example, are more underrepresented than women generally in America’s largest corporations. Just four openly LGBTQ+ CEOs head these corporations, only one of whom is female and none of whom is trans. 2 It’s thus not surprising that LGBTQ+ women and trans employees often feel isolated from one another in the workplace, creating a more negative workplace experience and affecting their motivation to become a top executive. Our research also finds that LGBTQ+ women face increased rates of sexual harassment and discrimination based on gender and orientation. Moreover, trans employees face a distinct set of obstacles to performance and career progression.

To engage a new generation of workers and consumers—many of whom choose careers and products based on diversity and inclusion—companies must move beyond public gestures of support for LGBTQ+ issues to create a more positive work experience. Additional efforts are especially needed in a world—and workplace—with the added health risks and isolation of remote working in the coronavirus era. We recommend specific steps that senior company leaders and human-resource professionals can take to ensure their organizations are safe and welcoming environments for LGBTQ+ employees.

Underrepresentation and isolation

Academic estimates have found that 5.1 percent of US women identify as LGBTQ+ as do 3.9 percent of US men. 3 Their representation in corporate America, however, is much lower than these levels 4 (Exhibit 1).

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The representation of LGBTQ+ women starts to drop off beginning with the first promotion to the manager level. While LGBTQ+ women make up 2.3 percent of entry level employees, they comprise only 1.6 percent of managers and even smaller shares of more senior levels. 5

This underrepresentation increases the likelihood that LGBTQ+ women will feel isolated at work. With so few others like them, they are more likely to represent their entire group when they’re the only one like themselves in meetings or events.

Our research shows that stress increases when a person experiences “onlyness,” or being the only one on a team or in a meeting with their given gender identity, sexual orientation, or race. Employees who face onlyness across multiple dimensions face even more pressure to perform. For LGBTQ+ women, who are workplace minorities in both gender and sexual orientation, the only experience is common—and particularly challenging—in corporate environments. LGBTQ+ women are twice as likely as women overall to report being an “only,” and they’re seven times more likely to say so than are straight white men. LGBTQ+ women of color are eight times more likely than straight white men to report onlyness (Exhibit 2).

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LGBTQ+ women, especially bisexual ones, also experience more microaggressions, like hearing demeaning remarks about them or people like them. Compared with straight women and straight men, bisexual women are 13 and 28 percentage points, respectively, more likely to have experienced microaggressions (Exhibit 3).

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LGBTQ+ women are also more than twice as likely as straight women to feel as though they cannot talk about themselves or their life outside work—and more likely than straight women or LGBTQ+ men to report they feel as though they need to provide more evidence of their competence.

LGBTQ+ women are also the most likely to say they have reported microaggressions to their company—alerting managers to what can become legally sensitive work-culture issues that affect all women, even if straight women may be less aware of them. These include, for example:

  • Pressure to play along. LGBTQ+ women are almost twice as likely to feel the pressure to “play along” with sexual discussion, humor, or actions than their straight-women and male-LGBTQ+ counterparts.
  • Targets of sexist jokes. Half of LGBTQ+ women hear sexist comments or jokes about their gender while at work—1.5 times more than straight women and 2.6 times more than LGBTQ+ men.
  • Targets of sexual harassment. More than half of LGBTQ+ women report having experienced sexual harassment over the course of their career, 1.4 times more than straight women and 1.9 times more than LGBTQ+ men.

Effects on career progression

Three in 20 LGBTQ+ women believe that their sexual orientation will negatively affect their career advancement at work. For LGBTQ+ men, this number is even higher, at six in 20.

Compared with straight women, LGBTQ+ women are also more likely to report that their gender has played a role in missing out on a raise, promotion, or a chance to get ahead. Despite these challenges, LGBTQ+ employees are just as likely as their straight counterparts to aspire to be top executives (Exhibit 4).

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LGBTQ+ women, however, often report different motivations behind their executive aspirations. Specifically, they are 1.5 times more likely than straight men and 1.2 times more likely than LGBTQ+ men to be motivated to advance into senior leadership so that they can use their position to be a role model for others like them. LGBTQ+ women are also 1.4 times more likely than straight men to seek senior-leadership roles to have a positive impact on the world.

Bringing your full self to work

Women who are out as LGBTQ+ are happier with their careers, and view both their companies and their managers more favorably compared with their closeted peers (Exhibit 5). This is likely a two-way street, with more welcoming and positive workplaces making it easier for LGBTQ+ women to come out of the closet; in turn, the psychological value of being out contributes to happiness and career satisfaction for LGBTQ+ women.

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Making it psychologically safe for LGBTQ+ women to be out of the closet at work should be a priority for companies striving to win the war for talent and retain their employees. LGBTQ+ women who are open about their sexuality at work are half as likely to plan to leave their current employer in the next year compared with their closeted peers (8 percent versus 16 percent), and are a third more likely to plan to stay for five years or more (51 percent versus 38 percent).

The trans experience in the workplace

Gender-diverse people identify with a gender other than the one assigned at birth, multiple genders, or no gender—including trans, genderfluid, genderqueer, and gender nonconforming, for example. In this discussion, “trans” refers to people in our data set who identified as trans or as nonbinary, while cisgender refers to those who do not identify as trans or as nonbinary. 6

It is estimated that roughly 1.4 million adults in the United States identify as trans, 7 and our data suggest that the workplace environment for trans people is heavily shaped by the experience of onlyness. Trans people are much more likely to report being an only, in both gender and sexual orientation. Trans people are also less likely to have the support of a sponsor (21 percent versus 32 percent of cisgender people).

Trans people face especially sharp barriers to advancement in the workplace, and their experience is distinct from that of cisgender people who also identify as lesbian, gay, bisexual, or queer. People who identify as trans in our research set are roughly the same age as cisgender people, but they are much more likely to be in entry-level positions than cisgender people. They’re also less likely to have management, evaluation, or hiring responsibilities. And they’re more likely to view their gender or sexual orientation as a barrier to advancement (Exhibit 6).

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Barriers for trans people are likely driven in large part by the workplace environment they face. They are almost twice as likely to hear sexist jokes about people of their gender or to hear demeaning comments about people like themselves, and they are more than three times more likely to feel like they can’t talk about themselves or their life outside work.

These barriers likely contribute to the fact that trans people are much more likely to frequently think about leaving their company (32 percent versus 21 percent of cisgender people), and they are more likely to expect to stay at their current company for less than a year (18 percent versus 8 percent of cisgender people).

While there is much more that needs to be done to correct the barriers facing trans people, there is some cause for optimism that things may be changing: trans people are more likely to report having been promoted in the past year than cisgender people (25 percent versus 14 percent).

Looking ahead

To make meaningful progress for LGBTQ+ employees, companies can start with a few basics:

Create structural support for trans employees. While not all headwinds can be corrected by companies, there are clear steps they can take to improve the experience of trans people. These include making health coverage inclusive of trans people, to prevent health issues from creating career barriers; supporting leave for transitioning colleagues; allowing employees to use the bathroom facilities they find most comfortable, including all-gender options; and ensuring that HR systems are inclusive of all employees’ genders and pronouns, including allowing changes to documents and records, for example, for those who are transitioning, or already have transitioned.

Stamp out inappropriate behavior. Companies can take steps to prevent and address microaggressions and demeaning behavior. They can, for example, encourage company-wide conscious inclusion training so that employees can recognize and respond to inappropriate behavior. This should include support, awareness, and sensitivity toward trans and gender-diverse colleagues and also include the proper use of pronouns and names. They can create safe-reporting channels to investigate and correct inappropriate behavior. Finally, they can ensure that leadership sets the tone for acceptable behavior with decisive and visible action to promote it.

Make the ‘only’ experience rare from the outset. Proactively highlighting the company’s support for the LGBTQ+ community can help ensure that prospective employees feel safe. Companies can reduce the “only” experience during recruitment by broadening their pool of diverse candidates and proactively providing them with feedback after their interviews. They can adopt blind resume-screening—removing names, gender signifiers, and affinity-group affiliations—to reduce the role of unconscious bias in hiring decisions. They can also can strengthen employee-resource groups by offering dedicated resources for LGBTQ+ employees, particularly LGBTQ+ women and trans employees who are at times overlooked in LGBTQ+ employee-resource groups.

Improve sponsorship to support career progression. Companies can improve sponsorship experiences and support LGBTQ+ employees’ professional development by training managers on how to be effective sponsors to junior colleagues and proactively pairing LGBTQ+ women and trans employees with sponsors to support their career progression. Training should include, for example, awareness of broader support systems or resource groups.

Promote inclusivity in remote-working environments. Working from home, especially in the postpandemic era, poses unique challenges for companies seeking to ensure that all employees feel respected and safe, including LGBTQ+ employees. Videoconferencing, for example, can reveal parts of home life. Online meetings can be isolating if the loudest voices are able to dominate conversations. Leaders can help combat these challenges by establishing direct lines of communication with all remote workers to see how they are doing and to ask what support they might need. Teams should also work together to set virtual-working norms to create an inclusive environment. These might include, for example, rotating speaking roles in meetings and scheduling downtime during the day so team members can address personal needs.

About the author(s)

Diana Ellsworth is a partner in McKinsey’s Atlanta office, Ana Mendy is a partner in the Southern California office, and Gavin Sullivan is a consultant in the Chicago office.

The authors wish to thank Peter Bailinson, Kasia Chmielinski, Ellis Griffith, Maital Guttman, Jessica Huang, Monatrice Lam, Morgan Paull, Margaret Swink, and Camille Weisenbach for their contributions to this article.

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